China to buy 6 billion euros of Spanish debt: report

By IBT Staff Reporter On 01/06/11 AT 5:24 AM

Chinese Vice Premier Li Keqiang has said his country is willing to buy about 6 billion euros ($7.9 billion) of Spain's public debt, Spanish newspaper El Pais reported on Thursday, citing government sources.

Li said at a meeting that China was willing to buy as much Spanish public debt as its Greek and Portuguese debt holdings combined, the sources told El Pais. They said that added up to about 6 billion euros in Spanish government bonds.

The Spanish government declined to comment on the report.

China has been increasing its holdings of European government debt, including that issued by Spain, vice commerce minister Gao Hucheng was quoted separately as saying on Thursday.

In a statement on the commerce ministry's website, Gao also said that China was confident in Spanish and European financial markets and that it was also confident that they would be able to overcome Europe's debt crisis. Gao accompanied Li on his trip to Spain this week.

On Thursday Li leaves Madrid, where he has been on a three-day visit, before traveling to the United Kingdom and Germany.

The El Pais report echos remarks Li made earlier this week but it is the first to give a figure.

El Pais could not confirm the 6 billion euro figure with Li, but spoke to Gao, who said that any transaction would be decided on by the date and size of any public debt issue.

Li wrote in an editorial in El Pais on Monday that China has confidence in the Spanish financial market and will continue to buy Spanish public debt.

Spain has come under increasing pressure from international debt markets on concerns it may be forced to follow Greece and Ireland and seek an EU or International Monetary Fund bailout. But while bond yields have risen, demand for Spanish debt remains solid.